UOB Group senior economist Alvin Liew does not rule out that the Bank of Japan (BoJ) may increase flexibility at the March meeting, when the policy review is completed.
Key statements:
“The Bank of Japan (BoJ) decided to keep its policy measures unchanged at its first Monetary Policy Meeting of 2021 (January 21). And in its outlook for economic activity and prices for January 2021, unsurprisingly, the BoJ maintained its cautious recovery outlook (unchanged from the October 2020 meeting), but improved growth forecasts for the Fiscal year 2021/22, taking into account the announcement of the government’s fiscal stimulus package in December 2020. “
“The policy inaction and the growth forecast updates for fiscal 2021/22 were in line with market expectations. Looking ahead to the next meeting, we maintain our vision that the BoJ does more and further expand its monetary policy. Remember also that the BoJ, during its October 2020 meeting, announced that it will review its QQE framework (purchasing program) and that it could herald changes in monetary policy at the March 2021 meeting ”.
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